A. Open-market operations B. The discount rate C. A change in reserve requirements D. Margin requirements 5. Suppose the money multiplier in the U.S. is 3. Suppose further that if the Federal Reserve changes the discount rate by 1 percentage point, banks change their reserves by 300.
E) both B and C of the above. Answer: A Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 3) Which of the following can be described as involving direct finance? A) A corporation's stock is traded in an over-the-counter market. B) People buy shares in a mutual fund. C) A pension fund manager buys commercial paper in the secondary market.
There is no maximum period of holding, a minimum amount has to be kept on savings account to keep it functioning. No loan facility is provided against savings account, Electronic Clearing System (ECS) or E-Banking are available to pay electricity bill, telephone bill and other routine household expenses. Generally, equated monthly instalments (EMI) for housing loan, personal loan, car loan, etc, are paid (routed) through savings bank account. The main features of current account are as follows: - Current bank accounts are operated to run a business it is a non-interest bearing bank account. It needs a higher minimum balance to be maintained as compared to the savings account.
How many months' worth of expenses do you think your financial reserve should include? Describe at least two reasons for this decision. (3-6 sentences. 2.0 points) 3. Would you rather have a savings account that offered simple interest, or an account that offered compound interest?
If subsequently resold for a sum larger than the cost, Alcoa should report for the sale of the treasury stock by debiting cash for the sale cost, crediting treasury stock for cost, and crediting additional paid-in capital from repurchased stock for the excess of the selling price over the cost. Adversely, if the stock is retired, Alcoa
codification oCh 15 FASB Codification Case Treasury Stock Facts Target Inc. arranged to purchase a large block of its common stock from a major shareholder. The total number of shares purchased is 10,000 and these shares are to be held as treasury shares. Target Inc. uses the cost method to account for treasury shares. This shareholder had a controlling interest before the transaction. After the transaction this shareholder no longer has a controlling interest.
Lesson 1 (3.0 points) 1. What is a money market account? (0.5 points) invests your money in low risk investments with predictable interest rates 2. What is a liquidation policy? (0.5 points) tells you when and how you're able to remove money from the account.
Hampton Machine Tool Company 9-280-103 Rev. 12/3/91 SUGGESTED ANSWERS Rocky Higgins April 2001 a)Prepare a sources and uses of cash statement for Hampton for the period November 30 – August 31, 1979. Sources and Uses of Cash November 30, 1978 – August 31, 1979 SOURCES Increase in bank debt $1,000 Increase in retained earnings 883 Decrease in cash 961 Increase in customer advances 726 Increase in accounts payable 600 Decrease in accounts receivable 561 Increase in taxes payable 329 Decrease in net fixed assets 92 Decrease in prepaid expenses 20 TOTAL SOURCES OF CASH $5,172 USES Stock repurchase $3,000 Increase in inventories 2,163 Decrease in accruals 9 TOTAL USES OF CASH $5,172 b)Reflecting on this sources and uses statement, why do you think this profitable company cannot repay its loan on time? What developments between November and August have contributed to this situation? Judging from the sources and uses statement it appears that the sharp increase in inventories is responsible for the company’s inability to repay its loan.
Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Fetter Company by the bank on October 25. This memorandum has not been recorded by Fetter. The company’s ledger showed one Cash account with a balance of $21,877.72. The balance included undeposited cash on hand. Because of the lack of internal controls, Allan took for personal use all of the undeposited receipts in excess of $3,795.51.
A 401(k) plan is a retirement plan offered by many companies. Such plans are tax-deferred savings vehicles, meaning that any deposits you make into the plan are deducted from your current pretax in- come, so no current taxes are paid on the money. For example, assume your salary will be $50,000 per year. If you contribute $3,000 to the 401(k) plan, you will only pay taxes on $47,000 in income. There are also no taxes paid on any capital gains or income while you are invested in the plan, but you do pay taxes when you withdraw money at retirement.